Graph 7-2
-According to Graph 7-2, area C represents:
A)the decrease in consumer surplus that results from a downward-sloping demand curve
B)consumer surplus to new consumers who enter the market when the price falls from P₂ to P₁
C)an increase in producer surplus when the quantity sold increases from Q₂ to Q₁
D)a decrease in consumer surplus to each consumer in the market

Question

Graph 7-2 
-According to Graph 7-2, area C represents:
A)the decrease in consumer surplus that results from a downward-sloping demand curve 
B)consumer surplus to new consumers who enter the market when the price falls from P₂ to P₁ 
C)an increase in producer surplus when the quantity sold increases from Q₂ to Q₁ 
D)a decrease in consumer surplus to each consumer in the market

Quizplus · Accepted Answer

Area C represents the increase in consumer surplus to new consumers who enter the market when the price falls from P₂ to P₁. This is because the demand curve is downward-sloping, which means as the price falls, more consumers are willing and able to purchase the good, resulting in an increase in consumer surplus.

Graph 7-2 -According to Graph 7-2, Area C Represents